UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
{X} QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the quarterly Period ended November 30, 1999
or
{ } TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT.
For the transition period from ________ to __________
Commission File Number: 1-13679
TOP AIR MANUFACTURING, INC.
(Exact name of small business issuer as specified in its charter)
Iowa 42-1155462
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
317 Savannah Park Road, Cedar Falls, Iowa 50613
(Address of principal executive offices) (Zip Code)
(319) 268-0473
(Issuer's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal
year, if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
----- -----
4,954,803 Common Shares were outstanding as of December 31, 1999.
Transitional Small Business Disclosure Format (check one):
Yes No X
----- ------
<PAGE>
TOP AIR MANUFACTURING, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets, November 30, 1999 (unaudited)
and May 31, 1999 1
Unaudited Condensed Consolidated Statements of Operations, Three
Months and Six Months Ended November 30, 1999 and 1998 2
Unaudited Condensed Consolidated Statements of Cash Flows, Six
Months Ended November 30, 1999 and 1998 3
Notes to Condensed Consolidated Financial Statements (unaudited) 4
Item 2. Management's Discussion and Analysis or Plan of Operation 5
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 8
Item 6. Exhibits and Reports on Form 8-K 8
SIGNATURES 9
EXHIBIT INDEX 10
<PAGE>
TOP AIR MANUFACTURING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
NOVEMBER 30, MAY 31,
1999 1999*
------------ -----------
CURRENT ASSETS
Cash and cash equivalents $ 4,955 $ 58,157
Trade receivables, net of allowance for
doubtful accounts November 30, 1999
$626,565; May 31, 1999 $628,000 5,097,966 7,341,602
Inventories (Note 2) 6,704,363 8,211,251
Income tax benefits 572,136 520,000
Other current assets 311,689 346,471
----------- ----------
Total Current Assets 12,691,109 16,477,481
----------- ----------
LONG TERM RECEIVABLES AND OTHER ASSETS
Notes receivable, net of current portion 103,013 126,782
Goodwill 944,253 983,159
Other assets 236,175 435,222
------------ ------------
1,283,441 1,545,163
------------ ------------
PROPERTY AND EQUIPMENT, at cost,
less accumulated depreciation
November 30, 1999 $1,599,244;
May 31, 1999 $1,403,788 3,468,063 3,699,426
------------ ------------
$17,442,613 $21,722,070
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt $ 2,213,169 $ 3,104,699
Other liabilities and accrued items 2,761,074 4,856,838
------------ ------------
Total Current Liabilities 4,974,243 7,961,537
------------ ------------
LONG-TERM LIABILITIES 7,472,754 7,775,969
------------ ------------
STOCKHOLDERS' EQUITY
Common stock 323,589 323,131
Additional paid-in capital 2,910,918 2,903,324
Retained earnings 2,121,257 3,094,085
------------ ------------
5,355,764 6,320,540
Less cost of treasury stock 360,148 335,976
------------ ------------
4,995,616 5,984,564
------------ ------------
$ 17,442,613 $ 21,722,070
============ ============
*Condensed from Audited Financial Statements.
See notes to Condensed Consolidated Financial Statements.
1
<PAGE>
<TABLE>
<CAPTION>
TOP AIR MANUFACTURING, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
November 30, November 30,
1999 1998 1999 1998
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Sales $3,853,249 $2,272,180 $6,758,220 $4,513,089
---------- ---------- ---------- ----------
Costs and Expenses:
Cost of goods sold 3,262,450 1,596,546 5,649,598 3,222,967
Selling and administrative
expenses 982,519 665,994 1,869,961 1,391,279
Research and development
expenses 181,148 137,316 397,489 271,214
Interest expense 188,266 122,769 412,814 240,406
------------ ------------ ------------ -------------
4,614,383 2,522,625 8,329,862 5,125,866
------------ ------------ ------------ ------------
(761,134) (250,445) (1,571,642) (612,777)
Other Income 42,913 19,310 54,114 23,890
------------- ------------- ------------- --------------
Income (loss) before
Income Taxes (718,221) (231,135) (1,517,528) (588,887)
Income Taxes (credits) (257,000) (78,811) (544,700) (210,742)
------------ ------------ --------------- -------------
Net Income (loss) $ (461,221) $ (152,324) $ (972,828) $ (378,145)
============ =========== ============= =============
Earnings (loss) per share:
Basic $ (.09) $ (.03) $ (.20) $ (.07)
============ ============ ============= ============
Fully Diluted $ (.09) $ (.03) $ (.20) $ (.07)
============ ============ ============= ============
Weighted Average Shares:
Basic 4,975,346 5,005,192 4,975,309 5,044,622
Fully Diluted 4,975,346 5,005,192 4,975,309 5,044,622
See Notes to Condensed Consolidated Financial Statements.
</TABLE>
2
<PAGE>
TOP AIR MANUFACTURING, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS Six Months Ended November 30, 1999 and 1998
1999 1998
------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by (used in)
operating activities $ 512,618 $(1,473,306)
--------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of property
and equipment 120,538 --
Purchase of property and equipment (72,036) (785,984)
Payments received on long-term notes
receivable 25,450 12,835
------------ ------------
Net cash provided by (used in)
investing activities 73,952 (773,149)
------------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings 4,285,000 6,010,699
Proceeds from long-term borrowings 300,000 4,662,414
Principal payments on short term borrowings (5,042,000) (5,473,699)
Principal payments on long term borrowings (166,652) (2,745,465)
Net proceeds from issuance of common
stock November 30, 1999 7,333 shares;
November 30, 1998 3,001 shares 8,052 2,823
Purchase of common stock for the treasury (24,172) (203,963)
----------- ----------
Net cash provided by (used in)
financing activities (639,772) 2,252,809
----------- ----------
Increase (decrease) in Cash and
Cash Equivalents (53,202) 6,354
CASH AND CASH EQUIVALENTS
Beginning 58,157 5,146
------------ -----------
Ending $ 4,955 $ 11,500
============= ============
See notes to Condensed Consolidated Financial Statements.
3
<PAGE>
TOP AIR MANUFACTURING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Condensed Consolidated Financial Statements
The financial statements of Top Air Manufacturing, Inc. and its wholly owned
subsidiaries (Parker Industries, Inc. and Ficklin Machine Co.) have been
presented on a consolidated basis as of November 30, 1999, May 31, 1999 and for
the six months ended November 30, 1999 and 1998. All significant intercompany
accounts and transactions have been eliminated.
The condensed consolidated balance sheet as of November 30, 1999, the condensed
consolidated statements of operations for the three and six months ended
November 30, 1999 and 1998 and the statements of cash flows for the six months
ended November 30, 1999 and 1998 have been prepared by the Company without
audit. In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows at November 30, 1999 and for all periods
presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principals
have been condensed or omitted. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and notes
thereto included in the Company's May 31, 1999 Annual Report to Shareholders.
The results of operations for the periods ended November 30, 1999 and 1998 are
not necessarily indicative of the operating results for the full year.
Note 2. Inventories
Inventories consist of the following:
November 30, 1999 May 31, 1999
----------------- ------------
Finished Goods $4,566,196 $6,141,110
Work in Process 440,007 830,326
Raw Materials and Supplies 1,698,160 1,239,815
------------ ----------
$6,704,363 $8,211,251
========== ==========
4
<PAGE>
TOP AIR MANUFACTURING, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This report contains certain forward-looking statements within the
meaning of the Federal Securities Laws which, while reflective of management's
beliefs or expectations, involve certain risks and uncertainties, many of which
are beyond the control of the Company. Accordingly, the Company's actual results
and the timing of certain events could differ materially from those discussed
herein. Factors that cause or contribute to such differences include, but are
not limited to, those factors discussed in the section captioned "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
those factors discussed in Exhibit 99 to the Company's Annual Report on Form
10-KSB for the fiscal year ended May 31, 1999.
RESULTS OF OPERATIONS
Net Sales:
The Company's net sales in the second fiscal quarter increased 70% to
$3,853,249 from $2,272,180 for the same period last year. Net sales for the six
months ended November 30, 1999 increased 50% to $6,758,220 from $4,513,089 for
the comparable period last year. The second fiscal quarter increase was a result
of incremental sales of Parker Industries products of nearly $1,900,000 offset
by a decrease in sales of Top Air and Ficklin products of approximately
$300,000. The six months ended November 30, 1999 increase was a result of
incremental Parker Industries sales of approximately $3,200,000 offset by a
decrease in Top Air and Ficklin sales of nearly $900,000. The sales decreases of
Top Air and Ficklin product lines were a result of the ongoing downturn in the
farm economy. The Company is continuing to take steps to control operating costs
and overhead during this recessionary period by consolidating operations of its
subsidiaries. The Company has closed and sold most of the land, buildings and
machinery of its production facility in Onarga, Illinois. The Company has also
implemented temporary plant shut downs at its Cedar Falls, Iowa and Jefferson,
Iowa production facilities and increased its volume of subcontract work for
other companies in order to increase plant utilization. Efforts have also been
made to improve cash flow by reducing dealer receivables and inventory.
Operating Costs and Expenses:
The Company's cost of goods sold in the second fiscal quarter increased
to 85% from 70% of net sales compared with the same period last year. Cost of
goods sold for the six month period ended November 30, 1999 increased to 84%
from 71% of net sales for the same six month period last year. These increases
as a percentage of sales, were primarily a result of reduced sales of the Top
Air and Ficklin product lines, which have historically had higher gross margins
than the Parker products that are now incrementally included in the sales mix,
coupled with lower utilization of the production facilities.
Operating expenses in the second fiscal quarter and six month period
ended November 30, 1999 increased 45% to $1,163,667 from $803,310 and 38% to
$2,294,450 from $1,662,493 respectively compared to the same periods last year.
These increases were a result of the incremental expenses incurred from the
Parker acquisition and an approximate $90,000 loss on the sale of property and
equipment from the closing of the Ficklin Machine location, which was offset by
decreases in operating expenses at Top Air.
5
<PAGE>
TOP AIR MANUFACTURING, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Interest Expense:
The Company's interest expense for the second fiscal quarter increased
53% to $188,266 from $122,769 for the comparable period last year. Interest
expense for the six months ended November 30, 1999 increased 72% to $412,814
from $240,406 for the comparable period last year. The increases were due to
higher levels of short-term and long-term debt outstanding during the periods
primarily to finance the acquisition of Parker.
Income Tax Expense:
The Company's Income Tax expense (credit) for the second fiscal quarter
and the six months ended November 30, 1999 is an estimate based on an annualized
effective tax rate of 36%. The income tax credits of $257,000 for the second
quarter and $544,700 for the six months ended November 30, 1999 represent the
benefit that would be received if the loss for the periods were carried back to
reclaim income tax paid in prior years.
Material Changes in Financial Position:
The Company's loss from operations of $972,828 was offset by $134,000
of net proceeds from long term debt, which resulted in a decrease in working
capital of nearly $800,000.
Liquidity and Capital Resources:
At November 30, 1999 the Company had working capital of $7,716,866, an
increase of $1,065,089 from a year ago and a decrease of $799,078 since May 31,
1999. The increase from a year ago is primarily a result of approximately
$3,300,000 in working capital acquired with the acquisition of Parker offset by
approximately $1,900,000 in losses from operations. The decrease since May 31,
1999 is described in "Material Changes in Financial Position" above. The current
ratio increased to 2.55 from 2.07 at May 31, 1999. The Company anticipates no
significant outlays for property and equipment in the foreseeable future. The
Company believes it has access to sufficient working capital to fund its
operations for the foreseeable future.
Because of the losses sustained by the Company over the last six fiscal
quarters and the effects of the Parker acquisition, the Company has been unable
to meet certain financial covenants contained in the credit and security
agreement with respect to its $6,000,000 line of credit. However, the Company
has made its payments due on principal and interest. As of November 30, 1999,
there was $1,625,000 outstanding under the Company's line of credit. The Company
is currently working with its bank to achieve full compliance with these
covenants within a relatively short time frame. No assurance can be given that
such will be the case. If the Company is not able to comply with the financial
covenants within this time frame, it is expected that alternative sources of
working capital financing, or other suitable arrangements with the current
provider of working capital, will be required.
6
<PAGE>
TOP AIR MANUFACTURING, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Year 2000 Readiness Disclosure:
The Company has developed a Year 2000 Plan to assess the Company's
vulnerability to system failures that may arise from the Millennium change and
potentially could impact the Company adversely. These threats have been
identified, and priorities have been established to address these risks, based
on the financial threat or seriousness of the implications. The project's
primary emphasis has been to look at the risks with the most severe financial
implication first, and then to address these critical problems. The Company
believes its review and identification process has been comprehensive,
specifically including:
o Vendors/Suppliers, including Utility Services;
o Central Accounting System;
o Office Systems;
o Building Systems;
o Factory Machinery and Equipment;
o Transportation Equipment;
o Engineering Systems; and
o Customer Relations.
The Company believes that all mission critical risks have been reviewed
or identified and resolved. The Company has been advised that its main computer
hardware and software systems will continue to function through the Millennium
change. The Company believes its other equipment will not be adversely affected
by the Millennium change or other factors mitigate against such risks. Utilities
that service the Company are unable to provide absolute assurances on Year 2000
reliability. Each believes that their own equipment is reliable, but can make no
further assurance. The Company is developing contingency plans to address such
possibilities. To date, the Company has met all major deadlines set by its Year
2000 Plan, and the Company anticipates addressing all of the identified risks
well before the Millennium change.
Based upon the actions taken by the Company and the information it has
received to date, the Company does not believe that the Millennium change will
materially affect its customers and vendors and the Company does believe that
its contingency plans, if required to be implemented, will be successful.
Although problems as a result of the Millennium change may still occur
in the future, as of January 14, 2000 the Company has not encountered any
material negative effects from the Millennium change. The Company will continue
to monitor its systems and the risks identified in its Year 2000 Plan for any
potential problems and take the appropriate actions to minimize any adverse
consequences.
7
<PAGE>
TOP AIR MANUFACTURING, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The annual meeting of the stockholders of the Company was held on
November 3, 1999.
(b) The following individuals were elected as directors of the Company at
such meeting: Steven R. Lind, Thaddeus P. Vannice, Sr., Wayne C.
Dudley, Dennis W. Dudley, Robert J. Freeman, Franklin A. Jacobs,
Sanford W. Weiss and S. Lee Kling.
(c) The election of eight individuals as directors of the Company was the
only matter voted upon at the annual meeting. The number of votes cast
for or withheld with respect to each of the nominees was as follows:
Votes Votes
Nominee Cast For Withheld
------- -------- --------
Steven R. Lind 4,615,041 16,865
Thaddeus P. Vannice, Sr. 4,609,941 21,965
Wayne C. Dudley 4,625,141 6,765
Dennis W. Dudley 4,624,206 7,700
Robert J. Freeman 4,624,206 7,700
Franklin A. Jacobs 4,625,041 6,865
Sanford W. Weiss 4,624,206 7,700
S. Lee Kling 4,615,141 16,765
(d) Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Number
--------------
(9.1) Amendment No. 1 to Amended and Restated Voting Trust Agreement
(11) Statement re computation of earnings per common share
(27) Financial Data Schedule
(b) There were no reports on Form 8-K filed during the quarter ended
November 30, 1999.
8
<PAGE>
TOP AIR MANUFACTURING, INC. AND SUBSIDIARIES
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TOP AIR MANUFACTURING, INC.
(Registrant)
Date January 14, 2000 /s/ Steven R. Lind
--------------------------------------
Steven R. Lind
President and Chief Executive Officer;
Principal Executive Officer
Date January 14, 2000 /s/ Steven F. Bahlmann
--------------------------------------
Steven F. Bahlmann
Chief Accounting Officer;
Principal Accounting Officer
9
<PAGE>
TOP AIR MANUFACTURING, INC. AND SUBSIDIARIES
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
9.1 Amendment No. 1 to Amended and Restated Voting Trust Agreement
11 Computation of Earnings (Loss) Per Common Share
27 Financial Data Schedule
AMENDMENT NO. 1 TO
AMENDED AND RESTATED VOTING TRUST AGREEMENT
This AMENDMENT NO. 1 TO AMENDED AND RESTATED VOTING TRUST AGREEMENT
(the "Amendment") made as of the 29th day of October, 1999, by and among S. LEE
KLING, FRANKLIN A. JACOBS, ROBERT J. FREEMAN, SANFORD WEISS, WAYNE C. DUDLEY,
DENNIS DUDLEY, VICKI JO HARKEN, JACKIE WILDEBOER, STEPHEN L. KLING, JR., FRANK
FREDERICK KLING, LEE C. KLING, and ALLAN B. KLING (the "Shareholders"), who are
the beneficial owners of certain of the shares of the issued and outstanding
common stock of TOP AIR MANUFACTURING, INC., an Iowa corporation (the
"Corporation"), and ROBERT J. FREEMAN AND DENNIS DUDLEY (the "Voting Trustees").
WITNESSETH:
WHEREAS, the Shareholders and the Trustees are parties to that certain
Amended and Restated Voting Trust Agreement made as of the 15th day of
September, 1992 (the "Agreement"); and
WHEREAS, the Shareholders desire to amend the Agreement to extend the
termination date of the Agreement.
NOW THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the receipt and adequacy of which is hereby acknowledged, the
parties to this Amendment mutually agree as follows:
1. Amendment. It is hereby agreed that Section 10 of the Agreement be
deleted in its entirety and replaced with the following:
"10. Termination. This Restated VTA shall terminate upon the earlier to
occur of the following:
A. January 4, 2005; or
B. the date on which the Shareholders unanimously agree to
terminate this Restated VTA."
2. Effect. Except to the extent expressly provided in this Amendment,
the terms and conditions of the Agreement shall remain in full force and effect
and shall be binding on the parties hereto.
<PAGE>
Entered into as of the date first above-written.
/s/ S. Lee Kling
------------------------------------------
S. Lee Kling
/s/ Franklin A. Jacobs
------------------------------------------
Franklin A. Jacobs
/s/ Robert J. Freeman
------------------------------------------
Robert J. Freeman
/s/ Sanford Weiss
------------------------------------------
Sanford Weiss
/s/ Wayne C. Dudley
------------------------------------------
Wayne C. Dudley
/s/ Dennis C. Dudley
------------------------------------------
Dennis C. Dudley
/s/ Vicki Jo Harken
------------------------------------------
Vicki Jo Harken
/s/ Jackie Wildeboer
------------------------------------------
Jackie Wildeboer
/s/ Stephen L. Kling, Jr.
------------------------------------------
Stephen L. Kling, Jr.
/s/ Frank Frederick Kling
------------------------------------------
Frank Frederick Kling
/s/ Lee C. Kling
------------------------------------------
Lee C. Kling
/s/ Allan B. Kling
------------------------------------------
Allan B. Kling
TRUSTEES
/s/ Robert J. Freeman, Trustee
------------------------------------------
Robert J. Freeman, Trustee
/s/ Dennis W. Dudley, Trustee
------------------------------------------
Dennis W. Dudley, Trustee
<TABLE>
<CAPTION>
TOP AIR MANUFACTURING, INC. AND SUBSIDIARIES
EXHIBIT 11 - COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE
Three Months Ended Six Months Ended
November 30, November 30,
1999 1998 1999 1998
----------------------- ---------------------
<S> <C> <C> <C> <C>
Basic:
Common shares outstanding at
the beginning of the period 4,976,290 5,078,757 4,968,957 5,083,456
Weighted average of common
shares issued (retired) during
the period (944) (73,565) 6,352 (38,834)
---------- ------------ ------------ ---------
Weighted average common
shares outstanding 4,975,346 5,005,192 4,975,309 5,044,622
========= ========= ========= =========
Net income (loss) $(461,221) $(152,324) $(972,828) $(378,145)
========== ========== ========== ==========
Net income (loss) per
common share $ (.09) $ (.03) $ (.20) $ (.07)
=========== ========== =========== ===========
Fully Diluted:
Weighted average common
shares outstanding 4,975,346 5,005,192 4,975,309 5,044,622
Net effect of dilutive securities
employee stock options # -- -- -- --
----------- ----------- ----------- -----------
Weighted average common and
common equivalent shares 4,975,346 5,005,192 4,975,309 5,044,622
========= ========= ========= =========
Net income (loss) $(461,221) $(152,324) $(972,828) $(378,145)
========== ========== ========== ==========
Net income (loss) per common
share $ (.09) $ (.03) $ (.20) $ (.07)
=========== ========== ========== ==========
#The stock options have not been included because they are antidilutive.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-2000
<PERIOD-START> JUN-01-1999
<PERIOD-END> NOV-30-1999
<CASH> 4,955
<SECURITIES> 0
<RECEIVABLES> 5,097,966
<ALLOWANCES> 626,565
<INVENTORY> 6,704,363
<CURRENT-ASSETS> 12,691,109
<PP&E> 5,067,307
<DEPRECIATION> 1,599,244
<TOTAL-ASSETS> 17,442,613
<CURRENT-LIABILITIES> 4,974,243
<BONDS> 0
0
0
<COMMON> 323,589
<OTHER-SE> 4,672,027
<TOTAL-LIABILITY-AND-EQUITY> 17,442,613
<SALES> 6,758,220
<TOTAL-REVENUES> 6,758,220
<CGS> 5,649,598
<TOTAL-COSTS> 2,213,336
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 412,814
<INCOME-PRETAX> (1,517,528)
<INCOME-TAX> (544,700)
<INCOME-CONTINUING> (972,828)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (972,828)
<EPS-BASIC> (.20)
<EPS-DILUTED> (.20)
</TABLE>
